Is The Market At The Bottom?

There is no doubt that the Real Estate market has been hit hard with slumping prices and low sales. Many people ask us when we think it will get better or when will the market hit the bottom?  That question can only be answered with absolute certainty when we’ve already hit the bottom and are coming back up.

Still, Bruce and I are constantly keeping up on local and national trends and news to help you make the best  real estate decision. Here are two articles that caught my eye this week.

Which States Will Be Early Risers?

“If you want to be in the right place when the recovery starts, that place may be in Colorado, Idaho, Oregon, Texas or Washington.

The recession didn’t start at the same time in every state, and it won’t end at the same time either. A new forecast from Moody’s Economy.com predicts that jobs growth will return first in those five states, starting in the last quarter of this year. Four of those states benefit from strong high-tech industries, and the fifth, Texas, has a strong base of energy industries.

The new forecast is released along with the monthly Adversity Index. Each month, Moody’s Economy.com and msnbc.com use data on employment, industrial production, housing starts and house prices to label each state or metro area as expanding, at risk of recession, in recession or recovering.

Like a jigsaw puzzle nearing completion, the index shows that the recession reached 373 of the nation’s 381 metro areas, and 49 out of 50 states (Alaska was spared), by the end of March.

A head start on recovery:

Why will some states recover faster than others?

High-tech industry is one element. A slowdown in technology spending in 2008 and 2009 has created a pent-up demand for technology — businesses that know they need to upgrade and are waiting for the ability to spend.

“States that have a high concentration in tech-related industries are well positioned to take advantage of this trend, which is particularly true of Colorado, Idaho, Oregon and Washington and to a lesser extent Texas,” said economist Andrew Gledhill of Moody’s Economy.com.

Another element for those early risers: better credit ratings.

“One factor that the five early job recovery states all have in common is less erosion in household credit conditions, with the worst of the group being Idaho,” Gledhill said. “As a result, once it seems apparent that recovery is setting in, households in these states will be more able to turn and inject money back into their local economies. There is less de-leveraging of household balance sheets in these states. This will in turn prompt a more favorable trend in certain types of service industries.”

Find the whole article and forecast maps at http://www.msnbc.msn.com/id/30991972

 

Another article:

Pending Home Sales Rise 6.7% in April- Biggest monthly jump in more than seven years may signal slump is ending

WASHINGTON – The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in more than seven years, a sign that sales are finally coming to life after a long and painful slump.

The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts’ forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.

“This is yet another positive indication that the bottoming process is forming,” Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. “Now if only prices would stabilize.”

Find the whole article at: http://www.msnbc.msn.com/id/31063474/

Many attribute this jump in pending sales to the $8,000 tax credit to first-time home buyers. If you aren’t familiar with the tax credit, please check out our blog post that outlines the details of this wonderful program.

This article refers to National stats., but we have seen local pending sales increase as well. We will continue to track pending sales as not all of them will materialize into closed sales. Mortgage rates recently jumped up and any buyers who had not locked in their rate may have trouble closing with the higher interest rates.